For the three months ended Oct. 31, Wal-Mart reported a profit of $3.74 billion, or $1.14 a share, up from $3.64 billion.

Revenue rose 1.7% to $115.7 billion, but sales at Wal-Mart U.S. stores open at least a year, excluding fuel, slipped 0.3%. The company had projected flat comparable-store sales. Traffic also fell, though shoppers spent slightly more on each trip.

The world’s largest retailer lowered its full-year profit forecast to a range of $5.11 to $5.21 a share, from $5.10 to $5.30 a share previously. Wal-Mart also forecast current-quarter earnings of $1.60 to $1.70 a share, while analysts surveyed by Thomson Reuters most recently projected $1.69 a share.

Walmart continues to struggle with the ramifications of a gov’t shutdown, increased payroll tax and slow employment growth. Consumers also are aware that SNAP cuts will hurt and collectively all these factors are causing WMT’s customer traffic to slowly ebb away like a receding tide.

Competitors in the form of dollar stores provide a closer option for fill-in trips that help reduce the use of gas and often offers them a smaller item package size to tide them over until the larger trip to WMT is sparingly run.

Walmart, an optimization wizard, may have run out of magic to continuously improve productivity to the same degree that they have delivered over the last decade. Lowering prices no longer drives an offsetting increase in traffic which has been the lifeblood of Wal-Mart and a diluted hemlock for its competitors.

Time will tell but WMT has the skills and capital to address their issues but an improving economy would go a long way to mend their sales.

Wal-Mart’s bid coincided with Janet Yellen’s comments to the Senate this morning. Could the stock be getting a boost from hopes that easy monetary policy will improve the economy enough to help Wal-Mart?

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.